What course, in such an event, should other countries pursue? It is necessary to presume to begin with that we are dealing with countries which have not lost control of their currencies. But a stage can and should be reached before long at which nearly all countries have regained the control. In Russia, Poland, and Germany it is only necessary that the Governments should develop some other source of revenue than the inflationary or turn-over tax on the use of money discussed in Chapter II. In France and Italy it is only necessary that the franc and the lira should be devaluated at a level at which the service of the internal debt is within the capacity of the taxpayer. Control having been regained, there are probably no countries, other than Great Britain and the United States, which would be justified in attempting to set up an independent standard. Their wisest course would be to base their currencies either on sterling or on dollars by means of an exchange standard, fixing their exchanges in terms of one or the other (though preserving, perhaps, a discretion to vary in the event of a serious divergence between sterling and dollars), and maintaining stability by holding reserves of gold at home and balances in London and New York to meet short-period fluctuations, and by using bank-rate and other methods to regulate the volume of purchasing power, and thus to maintain stability of relative price level, over longer periods. Perhaps the British Empire (apart from Canada) and the countries of Europe would adopt the sterling standard; whilst Canada and the other countries of North and South America would adopt the dollar standard. But each could choose freely, until, with the progress of knowledge and understanding, so perfect a harmony had been established between the two that the choice was a matter of indifference. INDEX American debt, 191 Aurelian, 152 Austria, elasticity of demand for money, 48 value of note issue, 52 currency of, 55 Bank of England, and forward exchange, 135 and gold, 171, 184, 190, 192 and existing system, 178 Bank rate, and prices, 21 and forward exchange, 136 pre-war effect of, 159 “Big Five,” 178 British Empire, currency of, 205 Business class, 18, 29 Cannan, Professor, 47 Capital, diminution of, 29 Capital levy, _versus_ currency depreciation, 63, 65 in Great Britain, 68 Cassel, Professor, 87, 92 Chervonetz, 51, 57 Consols, 12, 15 Credit-cycle, 83, 86, 187, 188 Cunliffe Committee, 140, 184, 194, 195 Cuno, Dr., 60 Currency depreciation, in history, 9, 11 advantage to debtor class, 10 incidence of, 42 _versus_ capital levy, 63 social evils of, 65 Czecho-Slovakia, 143, 146 Debtor class, political influence of, 9 Deflation, 143 and distribution of wealth, 4 and production of wealth, 4, 32 meaning of, 82 arguments for, 147 and Aurelian, 152